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Trade, Remittances, Institutions, and Economic Growth

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  • Thanh Le

Abstract

This paper empirically investigates the role of trade, remittances, and institutions in economic development in a large sample of developing countries using recently developed instruments for all these variables. Both cross-country (over 30 years) and dynamic panel data (over 5-year periods) regressions of growth rates on instrumented trade, remittances, and institutions provide evidence of a significant impact of trade, institutions, and remittances on growth. While institutions foster growth, remittances hamper it. The effect of trade on growth is positive in cross-sectional regressions but ambiguous in dynamic panel data regressions. These results are indicative of a more important role for trade in explaining growth in the very long run compared with over shorter horizons.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal International Economic Journal.

Volume (Year): 23 (2009)
Issue (Month): 3 ()
Pages: 391-408

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Handle: RePEc:taf:intecj:v:23:y:2009:i:3:p:391-408

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Keywords: Economic growth; trade; remittances; institutions;

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References

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Citations

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Cited by:
  1. Balli, Faruk & Guven, Cahit & Balli, Hatice O. & Gounder, Rukmani, 2010. "The Role of Institutions, Culture, and Wellbeing in Explaining Bilateral Remittance Flows: Evidence Both Cross-Country and Individual-Level Analysis," MPRA Paper 29609, University Library of Munich, Germany.
  2. James Dzansi, 2013. "Do remittance inflows promote manufacturing growth?," The Annals of Regional Science, Springer, vol. 51(1), pages 89-111, August.
  3. Biru Paul & Md. Uddin & Abdullah Noman, 2011. "Remittances and output in Bangladesh: an ARDL bounds testing approach to cointegration," International Review of Economics, Springer, vol. 58(2), pages 229-242, June.
  4. Ziesemer, Thomas H.W., 2012. "Worker remittances, migration, accumulation and growth in poor developing countries: Survey and analysis of direct and indirect effects," Economic Modelling, Elsevier, vol. 29(2), pages 103-118.
  5. Gnangnon, Sèna Kimm, 2014. "The Effect of Development Aid Unpredictability and Migrants’ Remittances on Fiscal Consolidation in Developing Countries," World Development, Elsevier, vol. 54(C), pages 168-190.
  6. Faruk Balli & Faisal Rana, 2014. "Determinants of risk sharing through remittances: cross-country evidence," CAMA Working Papers 2014-12, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  7. Michael Clemens and Timothy N. Ogden, 2014. "Migration as a Strategy for Household Finance: A Research Agenda on Remittances, Payments, and Development- Working Paper 354," Working Papers 354, Center for Global Development.
  8. Michael Clemens and David McKenzie, 2014. "Why Don't Remittances Appear to Affect Growth? - Working Paper 366," Working Papers 366, Center for Global Development.

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